Buying your first home is a milestone in most people’s lives, here are a few steps to make it a smooth process.
Know Your Financial Position
Talk to your bank or a broker to figure out your current financial position. They can also assist with obtaining a pre-approval so you can find out how much you can borrow and what your repayments would be.. It is also important to work out what the ongoing costs will be including rates, insurances and ongoing maintenance. This will assist you to work out what your budget is so you can look for properties without the disappointment of over committing and getting your hopes up on a property that is out of your current financial reach.
Now that your pre-approved…
Make the decision – Build, Established or Renovate.
These choices are all very different and again seek independent legal advice before choosing.
You can choose to buy a property ‘off the plan’. This means that you enter into a contract before:
- the building is out of the construction phase
- the title to the lot has been created.
When buying a property off the plan, you may be able to:
- have input into certain design aspects of the home
- save money on the purchase price.
Make sure you’re aware of the risks when you buy off the plan. These include:
- not being able to see the final result until after you’ve already bought the property
- unexpected delays in the building process.
Some land offices in the region are Riverstone Rise, Tannum Blue and Hill Close.
At Locations Estate Agents we have blocks and house land packages to suit all styles and budgets. We also have good working relationships with several reputable builders that can step you through the complete process.
First home buyers should always check if they are eligible for any stamp duty concessions or home owner grants. Care should be given to check if the property is unencumbered and if there are any easements of the property such as sewer/water/storm water lines, manholes and if the property is impacted by the Q100 flood level. These checks can be done with the local council and also your solicitor.
Will you be purchasing an established home that needs a bit of work?
Again seek independent advice in regard to your finances and ensure you’re in a position to afford the extra costs and potential risk involved. It also pays to obtain quotes from licenced and suitably qualified tradespeople for the cost of renovation works especially if you aren’t trade qualified yourself. Valuers won’t always ‘value up’ the costs of renovations or building so it is important to choose wisely.
Making your Offer
Making an offer on a home may seem daunting however your agent should make you feel at ease and talk you through the whole process.
If your offer is accepted straight away
If your offer is accepted straight away, it is not an indication that you offered too high. The vendors were most likely in a position to accept the deal and get the process started and felt it was reasonable without the need to negotiate. Sometimes its just very quick depending on the sellers’ motivation and time on the market.
Negotiation and counter offers
Sometimes your offer may be rejected and a counter offer is presented. Again it depends on the seller’s circumstances and your preferences on the property.
A reputable agent will keep you informed throughout the buying process and work for you and the vendor to come to an agreed price which also includes mutually agreeable terms and conditions.
How are offers made?
- making a verbal offer
- filling out a form with your written offer
- completing the contract of sale provided to you by the seller’s agent by inserting your offer.
If you make a verbal or written offer, the seller’s agent will formalise your offer into a contract of sale and present it to you to sign. At the end of the day, a contract needs to be signed to formally recognise the transaction but please seek independent advice before you sign anything.
The contract sets out:
- the price you are offering for the property
- details of when you will pay your deposit
- the time and date of settlement
- the terms and conditions of the transaction including finance, council compliance and building pest inspections
- The contract only becomes binding when you and the seller have both signed it
Before signing, take a copy of the contract away and discuss it with your solicitor. Don’t be pressured into signing a contract without seeking legal advice first.
Cooling off period
A cooling-off period of 5 days applies to contracts for residential property. This can be waived however it will need to be noted by either party and usually by solicitors representing their clients. If you do exercise your right to pull out of a contract during a cooling off period, note that a 0.025% penalty may be payable.
Paying the deposit
Once the contract becomes binding, you will need to pay the deposit. Follow the conditions set out in the contract—normally, you’ll need to pay within 2–3 days but some will require an initial deposit to be payable upon signing of the contract.
Your contract might be subject to:
- whether you get finance
- a building and pest inspection
- if you can sell your existing property
- council compliance
You must check to make sure these conditions are in the contract when you sign it. Hence why it is noted on the contract that you seek independent legal advice before signing.
If you’re not sure about anything, ask your solicitor to check it before you sign.
For more helpful tips about buying and selling, please get in touch via email email@example.com or call 0421 042 528.